The Central Bank of Egypt (CBE) has chosen its old historic building in downtown Cairo as the headquarters of its fintech hub.
The hub is set to begin operations this year, to be a forum for all parties in the financial technology system.
The CBE said that finTech Egypt is an independent FinTech hub driven by innovation and technology that acts as a unified platform to foster and connect all Fintech eco-system stakeholders, including fintech startups, financial institutions, regulators, service providers, mentors, and investors.
It aims to become a globally recognised FinTech hub in the Arab world and Africa, home to next generation financial services, talent, and innovative development.
According to the CBE, it was keen to establish the hub in downtown Cairo to combine the historic heritage of the building with the technology.
It added that the hub will become a one-stop shop that is essential for collaboration and networking for finTech-driven startups, mentors, financial institutions, support financing of startups by connecting them with investors and finTech fund of funds.
“It is also a technology-driven networking platform for all finTech stakeholders, provides access to finTech sandbox that acts as a virtual regulatory space for finTech startups, and well-structured space for FinTech-focused events, space, workshops, trainings and competitions,” the CBE said.
In a related context, the CBE announced its regulatory sandbox soft launch starting June 2019, and invited finTech startups and companies specialising in e-KYC solutions to apply for its first pilot cohort under the CBE regulatory sandbox principles and eligibility criteria.
“The CBE believes in keeping up with rapid developments in financial technology and striving to achieve an optimal balance between ensuring financial stability and consumer protection while as well advancing beneficial innovation to serve the banking and financial sector in Egypt,” it explained.
The purpose of the regulatory sandbox is to pave the way for faster and easier access to new financial solutions and embed compliance within the finTech ecosystem at an early stage. This will not only allow fintech innovators to focus on their core offering, but also ensure that consumers and other players in the market are not adversely affected by the regulatory uncertainty of the disruptive finTech activities.
The regulatory sandbox will work as a live testing ground for fintechs which are developing new business models that are currently hindered by stringent authorisation requirements and regulatory uncertainty.
FinTech startups and other businesses developing financial technologies (finTechs) can test their innovative applications in a live environment under the guidance and supervision of the CBE.
The CBE emphasised that financial technology (finTech) has recently become a promising and emerging industry across the globe that uses technology and innovation to broaden the frontiers of financial activities.
Due to the development in information technology, communication, and innovative financial applications and solutions, it enables businesses to use essential tools to enhance the efficiency of financial services and accordingly to boost the Egyptian economy.
“In order to bring new products and services to life, the CBE has developed its finTech strategy – as a part of its role as a catalyst for change,” it added.
The CBE has pledged EGP 1bn to fund the innovation support fund, with the participation of major institutions focused on investing in financial technology.
Fund-of-Funds investment vehicle is established along with major institutions focusing on technology and finTech investments for the purpose of launching an independent investment catalyst vehicle promoting investments into VC funds focusing on tech/finTech sectors.
It also aims at capitalising on the expertise and strengths of partner institutions co-investing with the CBE in creating a sustainable and independent investment platform mobilising funding and expertise to support the growth of the eco-system.